1 Stock That’s Just as Hot as Nvidia (Without All the Hype)

Nvidia stock may look like a strong option, but its valuation is through the roof. Enter this other under-the-radar stock.

| More on:
calculate and analyze stock

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When we think of hot stocks, NVIDIA (NASDAQ:NVDA) often comes to mind, with its skyrocketing growth fuelled by demand for artificial intelligence (AI) chips. However, investing in NVIDIA now might be daunting because of the overwhelming hype surrounding it. Often, hype can drive up prices, creating inflated expectations that may not always be met. Enter Propel Holdings (TSX:PRL), a Canadian fintech stock that’s thriving with growth, stability, and a forward-thinking business model — all without the frenzied attention NVIDIA gets.

Created with Highcharts 11.4.3Nvidia + Propel PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Investing in AI

NVIDIA’s meteoric rise in the stock market can be partially attributed to AI advancements. As exciting as this is, the stock price has surged to a point where some investors may wonder if they’ve missed the boat. High valuations can put pressure on the stock to keep meeting and exceeding these lofty expectations. Plus, when a stock is as hyped as NVIDIA, it often attracts a wave of investors chasing returns. This can lead to increased volatility if these investors start pulling out at any sign of slowed growth.

In contrast, Propel Holdings flies under the radar, though it holds a strong growth story of its own. Propel is a fintech company focused on consumer lending. It has shown impressive financial results, with a quarterly revenue growth of nearly 49% year over year and earnings growth of 95%. Propel’s business model is designed to bridge a gap in the financial market by providing access to credit for underserved consumers through an AI-powered lending platform. This niche allows Propel to carve out a valuable space in the Canadian lending market, without facing the intense competition that tech giants like NVIDIA contend with globally.

Strength

A key strength for Propel is its exclusive partnership with KOHO, a leading Canadian fintech platform. Through this partnership, Propel’s lending services are seamlessly embedded within KOHO’s app, providing KOHO users access to credit options directly through a trusted digital platform. This partnership not only expands Propel’s reach. It also strengthens its position in the Canadian fintech landscape. This positioning will allow it to capture more market share without the need for relentless marketing or sensationalized headlines.

Propel’s recent earnings reveal a company with strong fundamentals. With a profit margin of over 10% and a return on equity of 36.84%, Propel demonstrates profitability and efficient use of shareholder equity. Its forward price-to-earnings (P/E) ratio is 7.13, a notable contrast to NVIDIA’s sky-high valuation. Thus, Propel is an appealing investment for those who value solid earnings at a reasonable price.

Growth potential

Another reason Propel is exciting is its growth potential within Canada. Unlike NVIDIA, which faces saturated markets and fierce global competition, Propel operates in a relatively untapped niche within Canada’s fintech sector. The KOHO partnership is expected to launch fully by the end of 2024, giving Propel even more exposure and reach in the consumer credit space. This kind of organic growth model powered by partnerships and expanding market reach is often more sustainable.

Propel’s stock performance has also been compelling. Its market cap has steadily increased, moving from $295.54 million in mid-2023 to over $1.2 billion as of June 2024. Despite this, it maintains a price-to-book ratio of around 7.26, which is manageable compared to many tech giants. Propel also pays a dividend with a forward yield of 1.58%, a rare feature for growth-focused tech companies, adding a layer of stability for long-term investors.

Bottom line

While NVIDIA’s AI dominance is an exciting story, Propel offers a refreshing alternative for those seeking growth without the hype. Its business model aligns well with long-term consumer trends in fintech. And its financial performance shows a company that is not only growing but doing so sustainably. Propel’s stock may not be making headlines like NVIDIA. Yet, for discerning investors, it provides a unique opportunity in a high-growth sector with a reasonable valuation.

If you’re looking for a hot stock that’s making waves without the price tag or hype of NVIDIA, Propel Holdings might just be what you need. Its solid fundamentals, promising future outlook, and innovative partnerships make it an enticing choice for investors seeking growth in the fintech space. And with a focus on sustainable growth and accessible credit, Propel is well-positioned for long-term success.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Nvidia wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Propel. The Motley Fool recommends Nvidia. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

Safety helmets and gloves hang from a rack on a mining site.
Tech Stocks

Where I’d Invest $300 in the TSX Today

A TSX stock with a leading-edge safety technology is a screaming buy today for its high-growth potential.

Read more »

Map of Canada showing connectivity
Tech Stocks

1 Magnificent Canadian Stock Down 16% to Buy and Hold Forever

This Canadian stock might be one of the best opportunities out there right now while shares are down.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

This AI Stock Could Turbocharge Your TFSA With Substantial Growth Potential by 2030

Down almost 60% from all-time highs, AMD is an AI stock that has significant upside potential. Is the tech stock…

Read more »

a-developer-typing-lines-of-ai-code-while-viewing-multiple-computer-monitors
Tech Stocks

Constellation Software Looks Like a Tremendous Buy Today 

Constellation Software stock, which crossed the $5,000 mark, is trading below $4,500, presenting a compelling buy opportunity.

Read more »

Canada national flag waving in wind on clear day
Tech Stocks

Top Canadian Stocks to Buy for Great Growth in 2025

There are some Canadian stocks starting to recover, and these two look like top choices.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

3 Canadian Artificial Intelligence Stocks to Buy and Hold Until 2040

These three Canadian tech stocks to help you benefit from the surging demand for AI tech and infrastructure in the…

Read more »

money goes up and down in balance
Tech Stocks

Billionaires Are Selling Apple Stock and Buying This TSX Stock in Bulk

Billionaires might be dumping Apple stock after it lost over US$600 billion last week. But this other tech stock looks…

Read more »

Data center woman holding laptop
Tech Stocks

Better Tech Stock: Lightspeed Vs. Kinaxis?

These two tech stocks were once on top of the world, but after coming down in price, it might be…

Read more »